Moody's rates Hiland notes B3

Moody's Investors Service said it assigned a B3 rating to Hiland Partners LP's announced $200 million add-on senior note offering.

Proceeds will be used to repay borrowings under the partnership's senior secured revolving credit facility.

The B3 rating on the add-on note offering reflects its subordination to Hiland's senior secured revolving credit facility. Hiland's B1 corporate family rating was unaffected by this rating action and the outlook remains stable.

"Hiland has been investing in the build out of infrastructure in North Dakota at a quicker pace than we originally envisioned when we initially rated the partnership in September 2012," Moody's vice president Stuart Miller said in a news release.

"Because EBITDA growth has not kept pace with the increase in debt, leverage has ballooned to about 6.0x. This has weakly positioned Hiland's B1 CFR compared to its peers and could eventually lead to a negative rating action if there are protracted delays in completing the HH Pipeline and leverage remains at this elevated level."

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